Markets & Reports
High cost of equipment driving construction rental market
April 26, 2023 By Don Horne
The Construction Equipment Rental Market – Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028) report shows that the ever-increasing price of construction equipment is driving the rental sector.
According to ResearchAndMarkets.com’s report, the Construction Equipment Rental Market is currently valued at $118 billion and it is expected to reach $180 billion over the next five years, registering a CAGR of 5.16 per cent during the forecast period. (all valuations in U.S. dollars).
Companies that participated in the report:
- Herc Rentals Inc.
- H&E Equipment Services Inc.
- United Rentals Inc.
- Ashtead Group PLC
- Sumitomo Corp.
- Hitachi Construction Machinery (Hitachi Group)
- Liebherr International AG
- Kanamoto Co. Ltd
- CNH Industrial
- HSS Hire Group PLC
- Cramo Oyj
- Nishio Rent All Co.
Construction Equipment Rental Market Trends
The high cost of purchasing equipment, increasing economic uncertainty, a lack of capital, technology advancement, unpredictable construction and infrastructure growth, depreciation woes, costly breakdowns, and a lack of available space are all factors driving the demand for rental construction equipment.
Many major developed countries are focusing on port extension, railway tunnels, and underwater tunnels and are seeing more significant demand for cranes, thus driving the construction equipment rental market.
Third-party e-commerce websites offer low-quality machines at low prices, enticing customers to purchase the products. This low-quality equipment may encounter difficulties in a short period, increasing the demand for the construction equipment rental market.
Many companies in the market are providing buying and selling services for construction equipment and also renting them. Many major developed countries are focusing on port extension, railway tunnels, and underwater tunnels and are seeing more significant demand for cranes, thus driving the construction equipment rental market.
Moreover, the growing construction industry and several factors, like the global economic scenario, budgets, and overall economy, are promoting the market’s growth. Unpredictability in these aspects affects the businesses of construction equipment OEMs, as well as construction rental equipment. This, in turn, is leading to price fluctuations of rental, used, and new equipment.
Construction machinery manufacturers, such as Sumitomo Corporation, Hitachi, Caterpillar, and Liebherr, are offering rental services that face powerful competition from several regional and domestic players due to the competitive pricing and technologically advanced equipment availability.
However, during the COVID-19 pandemic, critical government construction projects, such as key utilities, hospital builds, and infrastructure, sustained work but at a slower pace with less labor force at the job site to avoid the spread of COVID-19. Therefore, in 2020, the value of the construction equipment rental market fell owing to a fall in global economic growth, which, in turn, is ensuing in a slowdown of construction work timelines.
To ramp up the efficiency of work and decrease the maintenance cost of the machinery, equipment rental software solutions provide a base for construction machinery rental companies. Most international companies have already begun using these software solutions to track operation efficiency, parts replacement cycle, and precise working hours.
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